Taurus Asset Management Company settled the case of suspected illegal trading practices with Sebi’s market regulator, charging about Rs. 1,94,82,201 as compensation costs. Sebi ‘s Settlement Order stated that the amount for settlement has been transferred on 25 June.
Taurus had made a bid for repayment on their own assets in one of their funds until Ballarpur Industries Ltd (BILT) defaulted on payments and was subsequently cancelled. Through discontinuing the redemption request, it was suspected that Taurus had granted himself a preferential privileges which, according to Sebi, would not have been available to other investors.
Ballarpur Industries Limited (BILT Paper) defaulted on its debt commitments, a minor fund-house, Taurus’ mutual fund, was struck massively in four debt schemes in Feb 2017. The schemes did lose somewhere between 7-11% in a single day.
It was also claimed that the applicant was conscious of the risk of default by BILT and that the Date and Time Stamping Machine (DTSM) had been interfered with in order to favor chosen creditors, including one of their own employees.
As per Sebi, Taurus also submitted that there were no complaints from unitholders with regard to the specific matter in relation to the various mutual fund schemes.
In addition, Taurus stated that it had already reimbursed the unitholders of the affected mutual fund schemes for Rs 9,63,883.
“By cancelling the redemption request, it is alleged that the applicant had given themselves a special treatment which would not have been available to other investors.
It is thus alleged that the applicant had resorted to fraudulent and unfair trade practice violating principles of fair valuation and investment valuation norms and thus failed to exercise proper due diligence,” mentioned by Sebi.
At a consultation with the SEBI Internal Committee on 4 March 2020, the approved members of the AMC addressed the provisions of the settlement.
The amended legal terms and conditions for resolving the litigation launched for such defaults were suggested through an e-mail dated 19 March 2020.
High Powered Advisory Committee of Sebi reviewed the suggested settlement terms and approved the case for settlement on payment of the sum on 29 May , the regulator stated in an instruction dated 23 July.
